Hakan Uslu, PhD*
* Assistant Prof. at the department of economics at Adıyaman University, huslu@adiyaman.edu.tr
ABSTRACT
The agricultural sector is seriously affected by changes in many economic, social, or environmental factors. Hence, the necessity of supporting the sector by governments in various ways has become an indisputable reality. However, regional characteristics must be taken into account in order for these supports to reach their goals. Using a dataset spanning from 2002 to 2020, the current study comparatively analyses the changes in the agricultural support and agricultural production, income, and the value of products in two agricultural regions of Turkey, Central Anatolia and Southeast Anatolia regions. The results highlight that the increase in agricultural income is very low in both regions compared to the substantial changes in agricultural support policies. Additionally, the increase in the values of agricultural products in both regions is much higher than the increase in agricultural income, suggesting that the costs in agricultural activities are too high in the analysed regions.
Keywords: Agricultural Supports, Income, Production, Value of Products
Introduction
In today’s economies, the agricultural policies implemented to ensure the sustainability of the agricultural sector create different consequences in distinct regions of countries. The main reason for these differences is the dissimilarity of the regions in the number of production factors and the productivity of these factors. Previous studies in the relevant literature also claimed that agricultural incentives and supports would produce diverse spatial results in different geographies (Daniel and Kilkenny 2009; Esposti, 2007). Therefore, it is important for the sectoral efficiency to take into account the characteristics of the regions in the policies to be implemented for the agricultural sectors of the countries. In this study, the agricultural supports given to the Central Anatolian and Southeast Anatolian regions of Turkey, known as the agricultural regions of the country, were statistically compared, and the effects of these supports on the selected agricultural indicators were analysed comparatively.
Agricultural support policies have always existed in the history of Turkey but have experienced substantial changes since the early 2000s. First, the importance of regional support of agriculture in terms of productivity and sustainability in agriculture necessitated the implementation of differentiated agricultural support policies according to regions. Additionally, the agricultural policies implemented in Turkey have experienced important changes in the last century as a result of the agreements with various international organisations. During this period, Turkey has made agricultural agreements with the World Trade Organization for the development of the agricultural sector, implemented various changes in sectoral policies with the European Union adaptation process and started to implement the ARIP (Agricultural Reform Implementation Project) program within the framework of the agreements signed with the World Bank and the International Monetary Fund. After these agreements, Turkey ended the implementation of the old agricultural policies and switched to the Direct Income Support method (Bayraktar and Bulut, 2016; Ataseven et al., 2020). In this method, the supports have been given to the producers by taking into account the production area, regardless of the number of products and price (Ates et al., 2017; Ataseven 2016). In 2002, the deficiency payment support was implemented and aimed to pay the difference between the target price and the market price to the producers and to prevent the formation of excess supply or supply deficit in the market (Yüceer et al., 2020). In 2004, the first national document for the development of the agricultural sector, The National Agriculture Strategy Document, was published. In 2006, the agricultural law, which states the purpose and scope of agricultural policies, entered into force (Koç et al., 2015; Demirdöğen and Olhan, 2014). Right after that, the National Rural Development Plan and Strategy were determined in 2007, and it was aimed to ensure the integration of the agricultural sector and the industrial sector at the regional level. Along with all these changes in agricultural policies, the implementation of regional policies was made more comprehensive, and hence, a Basin-Based Agricultural Production and Support Model was developed in 2009. The main purpose of the model is to increase the support for specific products that grow more efficiently in each basin of Turkey. However, this model did not make a noteworthy difference in the sector as these products have already received agricultural support in the basins where they are grown (Doğan and Gürler, 2015; Olhan, 2012). Another important agricultural policy implemented in Turkey is the European Union IPARD (Instrument for Pre-Accession Assistance-Rural Development) program implemented in the 2011-2020 period. This program aims to determine, develop, and support the agricultural policies that must be implemented in order to realise the rural development of the candidate countries to the European Union. Finally, the National Agriculture Project in 2017 supports sustainable agriculture, food safety and competitiveness of the sector in global markets.
As mentioned above, although there have been significant changes and developments in the agricultural policies implemented in Turkey in the last 20 years, there are still important differences between regions in terms of agricultural production, income, and other sectoral indicators. The existence of these differences in the regions where similar agricultural policies/supports are implemented requires the examination of these policies. Therefore, in order to enhance the sector in several ways, it is important to analyse comparatively whether the supports given to the regions reach their purposes and which supports are more efficient in which regions. Hence, the motivation of the current study is to analyse the changes in the agricultural supports and the changes in agricultural indicators by comparing the two important agricultural regions of Turkey, Central Anatolia and Southeast Anatolia. Specifically, the study comparatively analyses the relationships between the changes in each type of agricultural support given to the Central Anatolia and South-eastern Anatolia regions and the changes in agricultural income, production, and value of products in these regions during the 2002-2020 period. The main reason for comparing these two specific regions is that although the amounts of agricultural support received by these regions are comparable and they are similar in many respects, they have great differences from each other in terms of agricultural indicators such as the amount of production and income.
Given the analysed regions, the results of the study highlight that the increases in agricultural income remained at very insufficient levels compared to the significant increases in agricultural supports. Additionally, the increase in the values of agricultural products in both regions is much higher than the increase in agricultural income, implying that the costs in agricultural activities are too high in these regions. Moreover, the results show that although the deficiency payment support may have an increasing effect on the amount of production in the Central Anatolia region, it increases the cost of the state to pay the difference, since the agricultural commodities produced in this region have low added value and are sold at low prices in the market.
In the following section, a summary of the related literature is provided. The third section includes more detail on the data and methodology employed in the study. The fourth section reports the empirical findings. Concluding remarks, discussion and policy recommendations are provided in the final section of the study.
Literature Review
In the relevant literature, there are various empirical studies examining the changes in the agricultural sector caused by the agricultural policies and supports implemented in different regions and countries (Arisoy et al., 2017; Arisoy, 2020; Birişik et al., 2020; Eroğlu et al., 2020; Uslu and Apaydin, 2021). However, to the best of our knowledge, no study to date has comparatively analysed this association at the regional level. For example, Direk et al. (2019) investigate the development of agricultural supports and their impact on the sustainability of the agricultural sector in Turkey. Using time-series econometric models and a dataset for the period 2000-2018, they find a positive impact of real agricultural supports on real agricultural production value in Turkey. Baştan and Songül (2019) also studied the relationship between agricultural supports and the value of selected agricultural and animal products for the OECD member countries. Based on OECD and FAO databases for the time period between 2007-2017, their findings suggest that agricultural supports have a significant positive effect on the value of agricultural products but no effect on animal products.
Aktaş Koral (2013), on the other hand, examines the impact of agricultural supports on the exports of selected agricultural products in Turkey. Based on a dataset covering the time period between 1962-2010, the study implies that agricultural supports along with various border measures have mixed effects on the foreign trade of agricultural commodities and that the supports are as important as the exchange rates in foreign agricultural trade of Turkey. Hoekman et al. (2004) also focus on foreign trade and analyse how agricultural subsidies and border protections in OECD countries are related to welfare and agricultural foreign trades of developing economies. Their findings show that reductions in border protection have a larger positive effect on developing economies than reductions in agricultural subsidies. In relation to welfare in rural regions, Daniel and Kilkenny (2009) investigate the impact of agricultural payments on welfare in Europe and suggest that the farm payment policies decrease spatial agglomeration of farms and raise welfare in both rural and urban regions in Europe.
Eroğlu et al. (2020) analyse the impact of livestock supports on the amount of production and income in a province of Turkey using the treatment effect model. Their findings show that livestock support has a statistically significant positive effect on the production level while there are no statistical associations between the supports and the income of the farms. Serra et al. (2005) also employ farm-level data and analyse the relationship between replacement of price supports by area payments and pesticide use in the agricultural sector of France. They find that price effects on pesticide use are more elastic than area payment effects which indicate that decreases in price support in favour of area payment may reduce the usage of crop protection inputs.
Brady et al. (2009) aim to assess the effects of Common Agricultural Policy which decouples the direct agricultural payments from agricultural production in EU area on farm structure, landscape mosaic and biodiversity in a sample of EU regions. Their findings suggest that the policy has possible negative effects on the landscape, but it increases the land rental prices. Krishnaswamy (2018) empirically analyses the response of rice and wheat producers to agricultural price supports in India. The study results suggest that farmers increase the amount of rice production area and hence the amount of rice production in response to the price supports. However, wheat farmers do not change the patterns of land use but increase the total wheat production in proportion to the supports they obtained. Alam et al. (2011) examine the climate change adaptability of producers in Malaysia based on the agricultural subsidies given in the country. They suggest that the adaptation process of producers to climate change is related to their training and motivation rather than agricultural support.
Data and Methodology
Using a panel dataset covering the time period between 2002-2020, the current study employs scatterplots and correlation matrices to comparatively analyse the associations between the agricultural supports given to the agricultural sectors of the Central Anatolian and Southeast Anatolian regions and the agricultural indicators, including income, production and the value of products. Specifically, the area-based supports, deficiency payment supports, and animal husbandry supports given to the agricultural sectors in analysed regions were compared both regionally and within the provinces located in each region. At the same time, the study also employs analyses to compare the changes in agricultural production, income and product values in these regions considering the variations in agricultural supports. Scatterplots were used in order to compare the performances of the provinces located in the regions in terms of agricultural support, production, income and product value.
The main reason for comparing the Central Anatolian and Southeast Anatolian regions is that although the total agricultural support received by these regions in the last 20 years is very close to each other, they have great differences in terms of agricultural indicators. Specifically, in the 2002-2020 period, Central Anatolia is the region that receives the highest share from the total support given in the country with a total of 12 billion dollars, while the Southeast Anatolian region received agricultural support of 11.1 billion dollars, making it the second region in the country that received the highest share from the total agricultural supports. Despite the similarity in the agricultural supports obtained by these regions, the Central Anatolian region ranks first among all regions of the country in agricultural production, while the southeast Anatolian region is in the last place in agricultural production. Although both regions are the two regions of the country that receive the least rainfall, Central Anatolia is the region with the highest agricultural income in the country, while Southeast Anatolia is the region with the second least agricultural income in the country. Therefore, it is important for the future of the agricultural sector and the policies to be implemented in the region to analyse why the Southeast Anatolian region receives higher agricultural support compared to other regions and why it has lower agricultural production and income than other regions.
The panel data set used in the analysis includes the agricultural indicators of the Central Anatolia and Southeast Anatolia regions for the 2002-2020 period. The data on the variables of agricultural income, production and product value used in the analyses to examine the changes in the agricultural sector were obtained from TURKSTAT. Agricultural production is defined as the amount of product expected to be obtained from the cultivated area in the current production year. The agricultural product value expresses the total monetary value of crops and other planted products. Income is defined as the monetary value obtained by agricultural producers as a result of their agricultural activities and the goods and services they produce in a certain period. The data on agricultural supports were obtained from the Agricultural Economics and Policy Development Institute affiliated with the Turkish Ministry of Agriculture and Forestry. The types of support analysed in the study are field-based supports, deficiency payment supports and livestock farming supports, which make up the majority of all agricultural supports given in the country. Area-based supports are the agricultural supports given as direct income support to the producers in proportion to the area of agricultural production. Deficiency payment is a type of product-based support, and it aims to allow the producers to sell their products in the market at high prices and provides price and purchase guarantees to the producers. Livestock support is a type of support that encourages agricultural producers to continue both animal husbandry and animal feed production.
All the variables used in the analysis were obtained from the relevant databases in the Turkish lira. However, since many inputs such as energy, fertiliser and seeds used by agricultural producers in production are imported and therefore dependent on changes in foreign currencies, these variables have been converted into US dollars using the Central Bank of the Republic of Turkey annual exchange rates. Although these variables are included in both TL and USD in the comparative analysis tables, the analysis and interpretations are based on the information reported in US dollars.
Panel A in Table 1 provides descriptive statistics of the variables used in the study and correlation matrix for the Southeast Anatolia region, and Panel B reports pairwise correlations for the variables included in the analyses and descriptive statistics for the Central Anatolia region.
Empirical Findings
According to the pairwise correlation matrices in Table 1, total agricultural supports have a high correlation with agricultural income and product value in the Southeast Anatolia region, but there is a low correlation between the supports and income and production in the Central Anatolian region. Total supports have a low positive correlation with the amount of agricultural production in the Southeast Anatolian region, but the correlation between agricultural support and production in the Central Anatolian region turns negative. Area-based agricultural supports have a negative correlation with all agricultural indicators in both regions. While the deficiency payments have a positive correlation of over 80% with agricultural income and product value in both regions, it has a correlation of around 40% with the amount of production. The supports for livestock and agricultural indicators have a positive and high correlation in both regions. Agricultural income is in positive correlation with the amount of production and product value in both regions. Finally, the correlation coefficient between the agricultural product value and the amount of production in the Southeast Anatolian region is 0.58, while it is 0.38 in the Central Anatolian region.
In the following part of the empirical findings section, firstly, the changes in agricultural indicators of the Southeast Anatolia region and the results of the analysis in terms of agricultural support and sectoral development of the provinces located in the region will be reported. In the next part, the findings of the agricultural sector in the Central Anatolian region will be reported. The results of both regions will be discussed comparatively in the conclusion section of the study.
Southeast Anatolia Region
Table 2 reports the annual percentage changes in agricultural supports and sectoral indicators in both Turkish lira and US dollars in the 2002-2020 period of the South-eastern Anatolia Region. The last row of the table shows the 19-year percentage change in the analysed variables. Accordingly, while total agricultural supports on TL basis increased by 1.126 per cent in the last 19 years when these subsidies were converted into US dollars, the increase in total supports goes down to 165 per cent. While a total of 178 million dollars of agricultural support was given to the region in 2002, this amount reached 472 million dollars in 2020. Until 2010, the percentage increase in the total agricultural support in US dollars is greater than the percentage increase in TL. Although the total supports given to the agricultural producers in the region have increased in nominal terms in almost all study years, it has been observed that converted to US dollars, these supports have decreased continuously since 2014. Considering that the prices of most of the inputs (e.g., energy and fertilisers) of the producers in the region are indexed to the dollar, the gradual decrease in the supports against the dollar causes negativities for the producers. According to the types of agricultural supports, it is seen that the agricultural support that increased the most in the analysed period was the support given to animal husbandry. Although the support given for livestock farming have increased from 320.000 dollars to 67 million dollars since 2002 and exceeded approximately 20.000%, there has been a gradual decrease in this particular support in recent years. In the same period, field-based agricultural supports decreased by 36%, from 145 million dollars to 92 million dollars. Deficiency payments have increased by 700% in this period, rising from 33 million to 278 million. While the agricultural supports given to the South-eastern Anatolia region generally decreased in 2009 in all support types due to the 2008-2009 global financial crisis, these supports have also decreased against the US dollar, especially in recent years.
In the last 20 years, compared to the above-mentioned changes in agricultural supports in the South-eastern Anatolia Region, the sectoral indicators of the region such as production, income and the value of products have not displayed a similar performance. While the total agricultural income in the region was 3.5 billion dollars in 2004, it increased to 4.9 billion dollars in 2020. In the 2002-2020 period, the value of agricultural products increased from 3.3 billion dollars to 34.4 billion tons, and the amount of agricultural production increased from 6.4 million tons to 10.8 million tons. In recent years, while agricultural income and product value have decreased significantly against the dollar, there has been instability in the amount of production. Agricultural income increased continuously until 2012, except for the 2008-2009 global financial crisis, but there was a continuous decrease in agricultural income in the following years.
In order to provide a better context of the bivariate associations between the agricultural supports and the sectoral indicator across the Southeast Anatolia region, Figure 1 is a scatterplot of the association between per cent change from 2002 to 2020 in total agricultural supports (in the US $) and per cent change from 2002 to 2020 in total agricultural production (in tons). According to Figure 1, Şanlıurfa and Siirt are the provinces that experienced relatively large per cent increases in both agricultural supports and production. Although the total agricultural support in Adıyaman has increased by over 100% between 2002 and 2020, there has been a very little increase in the amount of production during this period. In the province of Gaziantep, despite an increase of approximately 50% in agricultural support, the amount of production in this province has doubled. In the same period, Kilis was the province with the highest increase in agricultural production among other provinces in the region, although there was almost no change in agricultural support. Considering the relationship between the change in total agricultural supports and the change in production, Gaziantep and Kilis can be shown as the most successful provinces in terms of agricultural support-production performance among the provinces of the region, while Adıyaman is the least productive province in this respect.
Figure 1: Scatterplot of the association between the total agricultural supports (US $) and the production (both measured as percentage change scores for 2002 and 2020)
Figure 2 displays a scatterplot of the relationship between percentage changes from 2002 to 2020 in total agricultural supports (in US $) and percentage changes from 2002 to 2020 in the value of agricultural commodities (in US $) produced in the provinces located in the Southeast Anatolia region. Based on the scatterplot, it can be said that Siirt is the province with the highest per cent increase in both total agricultural support and the value of agricultural products. In this particular province, specifically, the agricultural support has increased by more than 200%, and the agricultural products have been valued at around 450%. In Kilis province, on the other hand, there has been almost no increase in agricultural support and a slight decrease the province has experienced in the value of agricultural products produced in this particular province. In Batman province, although agricultural supports have increased by nearly 100%, there has not been a noticeable increase in the value of agricultural products. Compared to other provinces in the region, Gaziantep was the province where agricultural products were valued the most in proportion to the increase in agricultural support. In this province, while agricultural support increased by around 50%, the value of agricultural products increased by around 200%.
Figure 2: Scatterplot of the association between the total agricultural supports (US $) and the value of agricultural products (both measured as percentage change scores for 2002 and 2020)
Figure 3 is a scatterplot of the association between percentage changes from 2004 to 2020 in total agricultural supports (in US $) and percentage changes from 2004 to 2020 in agricultural income (in US $). According to Figure 3, although Şanlıurfa received the highest amount of agricultural support among other provinces in the region, it was the province with the least increase in agricultural income in the 2004-2020 period. On the other hand, although the increase in agricultural support in Siirt province was very limited, agricultural income increased by more than 160%. In the same period, agricultural support decreased only in the Gaziantep and Kilis provinces among the provinces of the region. However, the agricultural income of these provinces increased by approximately 70% and 25%, respectively. In the rest of the provinces located in the region, agricultural supports increased by 5%-35% on average, while agricultural income increased by 30% to 90% during the 2004-2020 period.
Figure 3: Scatterplot of the association between the total agricultural supports (US $) and the agricultural income (both measured as percentage change scores for 2004 and 2020)
Taking all these scatterplots together, Kilis and Gaziantep provinces can be considered as the most productive provinces in the region in terms of agricultural support-production performance, respectively. In terms of agricultural support and the value of products, Gaziantep and Siirt provinces appear to be the provinces where their products are valued the most, respectively. Finally, in terms of agricultural support-income performance, Siirt province is by far ahead of the other provinces in the region.
Central Anatolia Region
Panel A and Panel B in Table 3 report the percentage changes in agricultural supports and sectoral indicators, respectively, in both Turkish lira and US dollars for the 2002-2020 period of the Central Anatolia region. According to the table, while total agricultural supports increased by approximately 700% in nominal terms, this increase was around 70% in US dollar terms. The total amount of support given to the region increased from 355 million dollars in 2002 to 600 million dollars in 2020. The amount of area-based agricultural support, on the other hand, decreased by 53% from 347 million dollars to 162 million dollars. In the 2002-2020 period, the highest amount of support given to the region among other agricultural supports is deficiency payment supports. In this period, the deficiency payments increased by 42.000%, from 360 thousand dollars in 2002 to 153 million dollars in 2020. The nominal increase in the deficiency payments support has reached 200.000 per cent in 19 years. The year in which the difference payment supports increased the most in percentage term was 2005 with an increase of around 2.200%. Significant increases were also reported in the support given to animal husbandry in the region. In this period, supports for livestock farming increased from approximately 8 million dollars to 220 million dollars, an increase of around 2.500%.
Although significant fluctuations have been observed in the amounts of agricultural supports over the years, there have been increases in both nominal and dollar terms in all supports given to the Central Anatolia region, especially in 2019 and 2020. According to Panel A in Table 3, while there is an increase in a type of support in a given year, there is a decrease or relatively less increase in another type of support in the same year. These unequal increases or decreases in the amounts of different agricultural support types, which vary from year to year, cause inconsistencies in the agricultural supports and, therefore, negative consequences on agricultural income or production.
Panel B of Table 3 reports the annual percentage changes in agricultural income, production, and the value of products in the Central Anatolia region for the 2002-2020 period. According to Panel B, agricultural income obtained from agricultural activities in the region increased by 40%, from $6.7 billion in 2004 to $9.4 billion in 2020. However, the agricultural income in the region, which has increased in only two years since 2012, is in a general downward trend. Compared to the percentage increase in agricultural supports given to the region, the increase in agricultural income of the region is insufficient. In this respect, it can be asserted that agricultural supports cannot be converted into agricultural income in the region. According to the reported percentage changes in the amount of production in the last column of the table, agricultural production in the region has increased by nearly 100% since 2002. Specifically, the total amount of agricultural commodities produced in the region increased from 23.4 tons in 2002 to 46 tons in 2020. A decrease was observed in the amount of agricultural production in the region only in 5 of the last 19 years. Despite this significant increase in production, the value of agricultural products in the region has increased by only 76% in the last 19 years. In detail, the monetary value of the agricultural products increased from 3.9 billion dollars to 6.9 billion dollars in the analysed period. Considering all these changes, it can be concluded that although the agricultural supports given to the region promote the amount of agricultural production, they do not lead to significant increases in the value of the agricultural products, and hence they do not cause significant increases in the income of the producers.
Similar to Figure 1 discussed above, Figure 4 displays a scatterplot for the relationship between per cent change from 2002 to 2020 in total agricultural supports and per cent change from 2002 to 2020 in agricultural production in the Central Anatolia region. According to Figure 4, with an increase of more than 200 per cent in agricultural supports in the 2002-2020 period, Niğde is a province that received the highest share of agricultural support compared to other provinces located in the region. However, this increase in agricultural support did not affect the agricultural production in Niğde sufficiently, and therefore, a limited increase of around 20% has occurred in agricultural production during this period. Similarly, despite the relatively larger increases in agricultural supports in Çankırı, the increase in agricultural production was limited. Among other provinces in the region, Nevşehir was the only province where agricultural production decreased in this time period. In detail, although agricultural support in this particular province has increased by around 50%, production has decreased by around 15%. In the same period, according to the agricultural production in proportion to the agricultural supports given to the region, the province with the highest increase in agricultural production is Konya, with an increase of 180%. Similarly, agricultural support increased by approximately 100% in Aksaray and Karaman provinces, while agricultural production increased by around 140% in both provinces. According to Figure 4, the most productive provinces in the region in terms of agricultural support-production performance are Sivas and Kayseri, respectively. In the 2002-2020 period, while agricultural supports increased by 50% in Kayseri, production increased by 160%. In Sivas, although there was a 20% decrease in agricultural support, agricultural production increased by 120%.
Figure 4: Scatterplot of the association between the total agricultural supports (US $) and the production (both measured as percentage change scores for 2002 and 2020)
Figure 5 displays the scatterplot showing the percentage changes from 2002 to 2020 in agricultural supports and the value of agricultural products in the Central Anatolia region. According to the scatterplot, in the 2002-2020 period, the provinces with the highest increase in the value of agricultural products were Kayseri (165%), Konya (160%) and Sivas (120%), respectively. Within these three provinces, agricultural supports increased by over 100% in Konya, increased by around 50% in Kayseri, and decreased by 20% in Sivas during the same period. In this period, Sivas was the province with the highest increase in the value of agricultural products with respect to the increases in agricultural supports followed by Kayseri. While Niğde received the highest amount of agricultural support compared to the provinces in the region, the increase in the value of agricultural products remained at a limited level of 40%. Similarly, while the supports increased significantly in Çankırı, there was no noticeable increase in the value of agricultural products. In Nevşehir, there was no significant increase in the value of agricultural products compared to the 50% increase in agricultural supports.
Figure 5: Scatterplot of the association between the total agricultural supports (US $) and the value of agricultural products (both measured as percentage change scores for 2002 and 2020)
When the scatterplot for the association between agricultural supports and the values of agricultural products given in Figure 5 is compared with the scatterplot for the relationship between agricultural supports and the agricultural production amounts in Figure 4, it can be realised that many provinces show similarities in terms of the amount of production and the value of products, but there are significant differences especially in the provinces of Karaman and Aksaray. Accordingly, while the production amounts in these two provinces increased significantly, the increase in product values remained limited during the analysed period.
The association between per cent change from 2004 to 2020 in agricultural supports and per cent change from 2004 to 2020 in agricultural income is displayed in the scatterplot of Figure 6. According to Figure 6, the province with the highest relative increase in agricultural income in the 2004-2020 period was Aksaray, with an increase of 120%. This particular province is followed by the province of Konya, with an increase of 80% in agricultural income. Agricultural supports in both provinces increased by around 40%. However, while agricultural supports also increased by 40% in Kırıkkale province, agricultural income remained almost unchanged. On the other hand, although Niğde province has experienced more increase in agricultural support compared to other provinces in the region, the agricultural income of these provinces increased by around 40%. In the provinces of Yozgat and Nevşehir, a decrease was observed in both agricultural support and agricultural income. In the provinces of Eskişehir and Sivas, where agricultural subsidies have decreased, agricultural income has increased by around 30%. Kayseri province, on the other hand, has succeeded in increasing its agricultural income, although there has been no change in agricultural supports given to this particular province. In other provinces of the region, both agricultural support and agricultural income increased in limited amounts. In terms of the agricultural support-income performance association provided in Figure 6, it can be said that Kayseri and Sivas are the provinces that increased their income the most in the region compared to the changes in agricultural supports given to these provinces.
Figure 6: Scatterplot of the association between the total agricultural supports (US $) and the agricultural income (both measured as percentage change scores for 2004 and 2020)
When Figure 6 is compared with Figure 4, which shows the relationship between agricultural support and production, the provinces of Konya and Aksaray, among other provinces in the region, appear to be the provinces with the highest increase in both agricultural production and agricultural income compared to changes in agricultural supports. In addition, the increase in agricultural income was limited in Kayseri and Sivas provinces compared to the significant increases in agricultural production in these provinces.
According to Figures 4, 5 and 6, the provinces with the highest increase in agricultural production with respect to the changes in agricultural support were Sivas and Kayseri, respectively. In addition, the provinces with the highest increase in the value of agricultural products compared to agricultural supports were again Sivas and Kayseri. Finally, the provinces with the highest increase in agricultural income compared to the amount of agricultural support given are Kayseri and Sivas, respectively.
Concluding remarks and discussion
In this study, the associations between the changes in the agricultural supports given to the Central Anatolia Region and Southeast Anatolia Region, which are known as the agricultural regions of Turkey, and the changes in agricultural production, income and product values were examined comparatively at the regional and provincial levels for the time period between 2002 and 2020. The associations were analysed using tables and scatterplots, and both regions and provinces located in the regions were compared with each other.
The results of the analysis for the Southeastern Anatolia region showed that all agricultural supports in the region increased in nominal terms in the period subject to the analysis. However, when these supports are converted into US dollars, it has been revealed that all agricultural supports have decreased significantly compared to previous years, especially in recent years. In terms of agricultural support types, area-based supports have been the type of support that has decreased the most in the last 20 years, while the highest increase has been in agricultural supports given to livestock farming. However, although these supports are for animal husbandry, producers channel a large part of these supports to the production of agricultural products such as grain, corn, grass, and straw. Agricultural income, production, and product value, which are used to analyse the changes in the agricultural sector in the region, have also shown significant decreases and fluctuations in recent years. The comparative analysis for the provinces located in the region revealed that Gaziantep, Siirt and Kilis were the provinces that increased their agricultural production, income, and production values the most compared to the agricultural supports they received.
The results of the analysis for the Central Anatolia region, on the other hand, showed that this region has some differences from the South-eastern Anatolia region in terms of agricultural support. Therefore, there are significant differences in the agricultural indicators of this region, especially in terms of agricultural production. For example, during the analysed period, there has been a very large increase in deficiency payments compared to other supports given to the Central Anatolia region. In addition, the region doubled its agricultural production during this period. Finally, significant increases have been observed in all agricultural supports in this region in the last two years.
In the 2002-2020 period, when Central Anatolia and Southeast Anatolia regions are compared in terms of the indicators used in the analysis, the change in the total amounts of support given to the Southeast Anatolia region (165%) is more than twice the change in the amounts of support given to the Central Anatolia region (70%). In both regions, there are decreases at similar rates in area-based supports. The type of support that has increased the most in the Central Anatolia region is the deficiency payments support, and the rise in this particular support is approximately 60 times higher than the rise in the deficiency payment supports in the Southeast Anatolia region. In the Southeast Anatolia region, the most increasing support type is animal husbandry support, and there was an increase of 8 times more in the Southeast Anatolia region compared to the Central Anatolia region. Compared to these changes in agricultural supports, both regions have experienced limited growth in agricultural income. On the other hand, while production doubled in the Central Anatolia region, more limited growth in production occurred in the Southeast Anatolia region. Finally, although significant enhances were observed in the value of the agricultural commodities produced in the South-eastern Anatolia Region, the rise in the value of the products in the Central Anatolia region was insufficient compared to the growth in agricultural supports.
Based on the results of the analysis, it is possible to make recommendations for policymakers. First of all, the increase in agricultural income remained at very insufficient levels compared to the improvements in agricultural supports given to both regions. Therefore, policymakers should conduct studies/projects on why the agricultural supports implemented do not turn into agricultural income. There may be various reasons why the growth in agricultural income lags far behind the increases in the support provided. One of these reasons is the fact that climatic changes such as drought and agricultural diseases expand agricultural costs and decrease production, resulting in negative effects on agricultural income. Therefore, producers should be supported according to these specific problems in years when such problems are experienced. In addition, considering that the rate of insurance in the agricultural sector in Turkey is still around 20%, encouraging producers to insure their agricultural products will prevent such problems from reducing agricultural income. Another reason is that the production costs in the sector increase significantly from year to year, although the number of products per unit area (productivity) and market sales prices do not show significant changes from year to year. In other words, the fact that the rate of increase in costs is much higher than the rate of increase in sales prices and productivity has a distorting effect on agricultural income. Hence, policymakers have to make cost-reducing policies to eliminate this imbalance in order for agricultural supports to generate more income. Secondly, the fact that the increase in the values of agricultural products in the regions is much higher than the increase in agricultural income indicates that the costs in agricultural activities are too high and should be reduced. Thirdly, although the deficiency payment support in the Central Anatolia region may have an increasing effect on the amount of production in this region, it increases the cost of the state to pay the difference since the agricultural commodities produced in this region have low added value and are sold at low prices in the market. Since the South-eastern Anatolia region has agricultural products with higher added value and which can be sold at higher prices in the market, there has been a significant increase in the value of agricultural products in this region. Therefore, policymakers can reduce the cost of deficiency payments in the Central Anatolia region by encouraging the production of agricultural commodities with more value in the market. Finally, based on these analyses, it is important that policymakers change the direct income support method for the agricultural sector with cost-reducing methods.
Future studies may employ comparative analyses using other regions in the country and other sectoral indicators such as mechanisation in the agricultural sector, agricultural area and foreign trade.
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Tables
Table 1: Descriptive Statistics and Correlation Matrix (Million USD)
| Total Support | Area-B. Support | Defic. Support | Animal Support | Income | Value of Product | Product. | |
| PANEL A: Southeast Anatolia Region | |||||||
| Observation | 19 | 19 | 19 | 19 | 19 | 19 | 19 |
| Mean | 582 | 161 | 342 | 44.5 | 4,660 | 4,370 | 8.3 |
| Std. Dev. | 179 | 69.8 | 160 | 28.8 | 1,900 | 993 | 1.5 |
| Min | 178 | 82.7 | 33.2 | 0.3 | 3518 | 2,190 | 5 |
| Max | 827 | 281 | 521 | 82.5 | 6,810 | 6,070 | 10.9 |
|
Correlation matrix: |
|||||||
| Total Support | 1 | ||||||
| Area-B. Support | -0.128 | 1 | |||||
| Defic. Support | 0.967 | -0.328 | 1 | ||||
| Animal Support | 0.672 | -0.708 | 0.732 | 1 | |||
| Income | 0.801 | -0.473 | 0.854 | 0.764 | 1 | ||
| Value of Product | 0.797 | -0.399 | 0.830 | 0.755 | 0.894 | 1 | |
| Production | 0.283 | -0.716 | 0.381 | 0.679 | 0.627 | 0.584 | 1 |
|
PANEL B: Central Anatolia Region |
|||||||
| Observation | 19 | 19 | 19 | 19 | 19 | 19 | 19 |
| Mean | 647 | 323 | 129 | 141 | 8,790 | 7,210 | 31 |
| Std. Dev. | 131 | 188 | 80 | 84.1 | 3,510 | 1,470 | 7.6 |
| Min | 355 | 139 | 0.4 | 8.4 | 6,739 | 3,900 | 20.8 |
| Max | 947 | 725 | 265 | 277 | 12,500 | 9,600 | 46.1 |
|
Correlation matrix: |
|||||||
| Total Support | 1 | ||||||
| Area-B. Support | 0.391 | 1 | |||||
| Defic. Support | 0.406 | -0.533 | 1 | ||||
| Animal Support | 0.254 | -0.729 | 0.622 | 1 | |||
| Income | 0.409 | -0.552 | 0.805 | 0.786 | 1 | ||
| Value of Product | 0.462 | -0.506 | 0.862 | 0.764 | 0.910 | 1 | |
| Production | -0.220 | -0.849 | 0.387 | 0.764 | 0.523 | 0.380 | 1 |
Note: The numbers reported in descriptive statistics represent annual totals in the regions in billions of dollars. The figures for agricultural production in the last column show the total production amount in the regions as billion tons.
Table 2: Southeast Anatolia Region: Percentage changes in agricultural supports and sectoral indicators in Turkish Lira and US dollars (2002-2020)
| PANEL A: Agricultural Supports | PANEL B: Sectoral Indicators | |||||||||||||
| Total Supports | Area-Based Supports | Deficiency Payments | Animal Husbandry | Agricultural Income | Value of Products | Production | ||||||||
| Year | TL | $ | TL | $ | TL | $ | TL | $ | TL | $ | TL | $ | Tons | |
| 2002 | – | – | – | – | – | – | – | – | N/A | N/A | – | – | – | |
| 2003 | 73.4 | 74.9 | 89.9 | 91.5 | 0.9 | 1.8 | 127.5 | 129.4 | N/A | N/A | 39.5 | 40.7 | -1.1 | |
| 2004 | -3.5 | 1.3 | -17 | -12.9 | 88.3 | 97.6 | 843.3 | 890.2 | – | – | 0.9 | 5.9 | 4.5 | |
| 2005 | 39.4 | 47.9 | -1.7 | 4.2 | 195.1 | 213 | -23.5 | -18.8 | 8.9 | 15.5 | 6.8 | 13.3 | 9.4 | |
| 2006 | 30.5 | 22.3 | 11.3 | 4.2 | 46.9 | 37.6 | 197 | 178.2 | 6.8 | 0.1 | 12.1 | 5 | 3.3 | |
| 2007 | 23.5 | 35.8 | -2.6 | 7.1 | 44.4 | 58.8 | -22.6 | -14.9 | 3 | 13.2 | 2.8 | 13 | 3.6 | |
| 2008 | 5.8 | 6.5 | -18.9 | -18.4 | 13.2 | 13.9 | 321.7 | 324.5 | -9.1 | -8.5 | -7.8 | -7.2 | -35.6 | |
| 2009 | -20.1 | -33.3 | -41.2 | -50.8 | -9.1 | -24 | -36.6 | -47 | 31.7 | 10 | 26.1 | 5.4 | 54.2 | |
| 2010 | 21.4 | 25.2 | 20.9 | 24.7 | 21.7 | 25.5 | 19.8 | 23.6 | 41.4 | 45.8 | 29.6 | 33.6 | 6.6 | |
| 2011 | 23.6 | 11.1 | 4.1 | -6.5 | 12.5 | 1.1 | 122.5 | 99.9 | 12.1 | 0.7 | 17.7 | 5.8 | 5.7 | |
| 2012 | 6.5 | -0.7 | 12.6 | 4.9 | 7.8 | 0.4 | -9.8 | -16 | 3.6 | -3.5 | -4.8 | -11.3 | 4 | |
| 2013 | 10.7 | 4.6 | 1.4 | -4.1 | 8.8 | 2.8 | 33.1 | 25.8 | 4.1 | -1.6 | 8.7 | 2.8 | 11.7 | |
| 2014 | 1.2 | -12 | 7.4 | -6.7 | -2 | -14.8 | 7.8 | -6.3 | 2.3 | -11.1 | 3.7 | -9.8 | -11 | |
| 2015 | 13.7 | -8.6 | 11.4 | -10.4 | 14.3 | -8.1 | 9.4 | -12 | 26.5 | 1.8 | 25.2 | 0.7 | 13.2 | |
| 2016 | 4.1 | -6.3 | 7.2 | -3.4 | -5.1 | -14.5 | 6.5 | -4.1 | -0.5 | -10.4 | 0.6 | -9.4 | -13.8 | |
| 2017 | 17.7 | -2.5 | -6.6 | -22.7 | 31.2 | 8.6 | 15.9 | -4 | 19.2 | -1.3 | 9.5 | -9.3 | 14.2 | |
| 2018 | 22.6 | -7.1 | 58.9 | 20.4 | 10.8 | -16 | 16.7 | -11.5 | 29.4 | -1.9 | 43.3 | 8.6 | -13.1 | |
| 2019 | 10.5 | -6.2 | 24.7 | 5.8 | 16.3 | -1.3 | 3.5 | -12.1 | 9.6 | -7 | -11 | -24.5 | 4.5 | |
| 2020 | 14.2 | -7.6 | 8.3 | -12.4 | 10 | -11 | 70.7 | 38.1 | 28.7 | 4.1 | 79.3 | 45 | 19.7 | |
| 2002-2020 | 1126.7 | 165.2 | 195.8 | -36.3 | 3780.8 | 737.3 | 96777.3 | 20783.1 | 586.4 | 39.8 | 939.5 | 124.2 | 69.5 | |
Note: The numbers reported in the Panel A and B of the table shows the annual percentage changes in agricultural supports and the sectoral indicators, respectively. The last row of the table shows the percentage changes in the variables between 2002 and 2020 except for the agricultural income due to the data unavailability. Hence, the numbers reported at the bottom of agricultural income columns indicate percentage changes in agricultural income between 2004 and 2020. The table is created by the author using the dataset of the Turkish Statistical Institute and the Turkish Ministry of Agriculture and Forestry.
Table 3: Central Anatolia Region: Percentage changes in agricultural supports and sectoral indicators in Turkish Lira and US dollars (2002-2020)
| PANEL A: Agricultural Supports | PANEL B: Sectoral Indicators | |||||||||||||
| Total Supports | Area-Based Supports | Deficiency Payments | Animal Husbandry | Agricultural Income | Value of Products | Production | ||||||||
| Year | TL | $ | TL | $ | TL | $ | TL | $ | TL | $ | TL | $ | Tons | |
| 2002 | – | – | – | – | – | – | – | – | N/A | N/A | – | – | – | |
| 2003 | 78.3 | 79.9 | 79.3 | 80.9 | 549.2 | 554.8 | 17.1 | 18.1 | N/A | N/A | 27.8 | 28.9 | -11.3 | |
| 2004 | -16 | -11.8 | -19.8 | -15.8 | 21.1 | 27.1 | 210.4 | 225.8 | – | – | 8.1 | 13.5 | 9.6 | |
| 2005 | 9.6 | 16.3 | -4.5 | 1.3 | 2086.3 | 2219.2 | 23.7 | 31.2 | 11.4 | 18.2 | 5.4 | 11.8 | 9.4 | |
| 2006 | 18 | 10.5 | 14 | 6.8 | -2 | -8.2 | 84 | 72.4 | -3.7 | -9.8 | -3 | -9.1 | 1.1 | |
| 2007 | 18.8 | 30.7 | 15.4 | 26.9 | 82.5 | 100.6 | -21.1 | -13.2 | 2.3 | 12.5 | 4.4 | 14.8 | -17.6 | |
| 2008 | -19 | -18.4 | -36.5 | -36.1 | -0.9 | -0.3 | 160.1 | 161.9 | 12.3 | 13.1 | 19.2 | 20 | 13.8 | |
| 2009 | -20.2 | -33.3 | -46.4 | -55.2 | 86.2 | 55.6 | -38.4 | -48.6 | 24 | 3.7 | 16.6 | -2.5 | 22.3 | |
| 2010 | 19.6 | 23.4 | 12.6 | 16.1 | 22.7 | 26.5 | 28.7 | 32.8 | 16.9 | 20.5 | 5.8 | 9.1 | 2.6 | |
| 2011 | 26.8 | 13.9 | 3.8 | -6.7 | 17.3 | 5.4 | 65.1 | 48.4 | 17.6 | 5.6 | 21.9 | 9.5 | 4.4 | |
| 2012 | 4.4 | -2.7 | 15.4 | 7.5 | -40 | -44.1 | 47.9 | 37.8 | 3.9 | -3.2 | -4.9 | -11.4 | -2.6 | |
| 2013 | 21.3 | 14.7 | 2.4 | -3.2 | 50.2 | 42 | 25.7 | 18.8 | 13.6 | 7.4 | 23.4 | 16.6 | 13.1 | |
| 2014 | 6.7 | -7.2 | 7.7 | -6.3 | 18.7 | 3.2 | -10.9 | -22.5 | 8.4 | -5.7 | 1.8 | -11.5 | -4.4 | |
| 2015 | -6.3 | -24.6 | 4.4 | -16 | -48.1 | -58.3 | 22.2 | -1.7 | 18.1 | -5 | 25.2 | 0.7 | 13.4 | |
| 2016 | 37.8 | 24 | 5.3 | -5.2 | 120.4 | 98.4 | 12.5 | 1.2 | -0.8 | -10.7 | -2.3 | -12 | 3.3 | |
| 2017 | -2.2 | -19 | -4 | -20.5 | -14.5 | -29.2 | 11.9 | -7.3 | 16.9 | -3.2 | 13.1 | -6.3 | 3.4 | |
| 2018 | 16.9 | -11.4 | 44.9 | 9.8 | -6 | -28.7 | 5.3 | -20.2 | 21.3 | -8.1 | 20.5 | -8.7 | -1.8 | |
| 2019 | 33.9 | 13.7 | 25.7 | 6.7 | 59.9 | 35.7 | 46.6 | 24.4 | 26.1 | 7 | 31 | 11.2 | 7.8 | |
| 2020 | 31.2 | 6.2 | 23.1 | -0.4 | 53.7 | 24.4 | 39.8 | 13.1 | 22.3 | -1.1 | 19.2 | -3.6 | 10.3 | |
| 2002-2020 | 691.9 | 70.7 | 117.0 | -53.3 | 196983 | 42421.6 | 12114.6 | 2533.5 | 588.4 | 40.1 | 721.7 | 76.9 | 96.6 | |
Note: The numbers reported in the Panel A and B of the table shows the annual percentage changes in agricultural supports and the sectoral indicators, respectively. The last row of the table shows the percentage changes in the variables between 2002 and 2020 except for the agricultural income due to the data unavailability. Hence, the numbers reported at the bottom of agricultural income columns indicate percentage changes in agricultural income between 2004 and 2020. The table is created by the author using the dataset of the Turkish Statistical Institute and the Turkish Ministry of Agriculture and Forestry.